TFM Sunrise Update 11-2-2021


Corn futures traded two-sided overnight atop Monday’s higher trading ranges. Dec corn is up 2 this morning to 5.81 after rallying 75 cents since Oct 13 as talk of high fertilizer prices threaten to lower global 2022 corn planted acreage.  U.S. Corn used for Ethanol was 407.5 mil bu in September, 1.3% higher than in September 2020.  DDGS production rose to 1.761m tons.  Commodity brokerage StoneX on Monday raised its estimate of the average U.S. 2021 corn yield to 177.7 bushels per acre (bpa), from 176.6 in its previous monthly report released Oct. 4. The firm raised its corn production forecast to 15.119 billion bushels from 15.022 billion previously.  StoneX said its production figures were based on the USDA’s Oct. 12 estimates of harvested acreage.  Corn harvest was pegged at 74% vs 66% last week, and 81% a year ago.  The dollar is consolidating after posting some wide swings the past week.  Crude is mixed this morning while pausing from its rally.


The soy complex is firm this morning with Jan beans holding the majority of open interest, up 4 cents to 12.55-3/4.  Prices remain entrenched in a sideways trading range buoyed by near-term Moving Average support above 12.00.  StoneX raised its forecast of the U.S. 2021 soybean yield to 51.9 bpa, from its Oct. 4 figure of 51.3 thus upping its forecast for U.S. soybean production to 4.490 billion bushels, up from 4.436 billion previously.  Soybeans harvest is 79% complete vs 73% last week, and 86% a year ago. U.S. Soybean Crushings came in at 164 mil bu in September, 4% lower than same period last year.  Crude oil production was 1.5% lower than same period last year; Crude and once-refined oil stocks were up 17.5% year-over-year.  Chinese Jan beans were up 10 yuan overnight ; Soymeal down 38; Soyoil down 20; Palm oil down 44; Corn up 12.  Malaysian palm oil prices overnight were up 8 ringgit (+0.16%) at 4969.


Wheat futures continued to march higher and into new highs overnight on technical momentum.  The Dec Chicago contract hit 8.07 on gains of 9-3/4 cents.  Dec KC rose 8 cents to a new high of 8.14-1/2;  And, Dec MPLS led the pack with gains of 11 to a new high of 10.86-1/2.  The steep rise in wheat futures signals tight global wheat supplies and record low exporters stocks to-use-ratio.  USDA may raise U.S. 2021/22 wheat carryout on Nov 9 due to lower exports.  Season to date exports are near 354 vs  419 last year.  USDA’s goal including flour is 875 vs 992 last year.  The U.S. winter wheat crop is 45% Good-to-excellent vs 46% last week, and 43% a year ago.  Winter wheat planted is 87% vs 80% last week, and 88% a year ago.  Winter wheat emerged 67% vs 55% last week, and 70% a year ago.  Futures are overbought and overdue for a correction, so we do expected some knee-jerk reaction in the coming days.


Cattle futures are called mixed for today after experiencing choppy trade to start the week, before prices faded lower into the close on technical selling, a price drop in feeder markets, and concerns for retail demand.  The weak price action the past couple of sessions is concerning to the cattle markets, as the markets struggled to push higher despite overall-supportive fundamental news.  Cash trade was quiet, typical for a Monday.  Producers are hoping for some follow through strength after last week’s bid higher.  Trade will likely occur in the second half of the week.  Closing retail values were firmed off midday trade as Choice carcasses gained 1.86 to 287.58 and Select added 1.02 to 264.39.  The load count was light at 82 loads.  The demand for higher grade Choice beef is noticeable in the Choice/Select spread trading at a wide 23.23.   Feeder cattle saw selling pressure across the market, fueled by strength in the corn and wheat market.  November feeders broke technically, and posted their lowest close since May last spring.


Hogs are called steady to lower. higher.  Monday’s trade ended firm in two-sided trade to start the week.  Technical buying and some short covering after last weeks improved technical close supported the market.  Weekly charts posted a hook reversal and a possible double bottom on the charts last week, and saw some follow through to start the week.  At midday, the retail pork carcasses were firmer, but the gain disappeared as closing prices were 4.08 lower to 92.44.  Movement was light/moderate at 335 loads.  Overall cash market remains soft, and the Cash Hog Index reflects that trading is 0.81 lower to 79.89.  In National Direct hog trade, on a national basis, compared to the previous day’s weighted average, hog values were quiet, gaining .04, keeping the overall cash tone weak.  The hog market trying to build a bottom and the strong price action the past few days reflects that idea. Price looks to have turned, and may be poised to push higher, but the market will need some fundamental backing.  Feb hogs could look to see some recovery into the $80 window.


Matthew Strelow

Sign up to get daily TFM Market Updates straight to your email!

back to TFM Market Updates